Online lenders are taking advantage of college students by offering them loans with inappropriate interests, government-backed publication Global Times revealed. 

"The market [of online lending platforms for college students] started last year, when the lending market became more specialized, until small loan services appeared," said Song Yongjun, head of Xiongdi Hezhong Technology, a company that promotes online lending apps to college students.   

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How it works

The walls of colleges and universities are plastered with ads of online lenders, luring in the students who avail the loans for things such as buying new clothes, a new computer, or to start a business.  

Q, a student from Baoding University who spoke to Global Times in request of anonymity, said that 10 of his classmates were persuaded by their school to sign an agreement to borrow money from Qufenqi, a lending platform.

Q admitted that he borrows money from time to time "for some random needs like buying clothes." He borrows around ¥300 ($46) every time and repay it within three months with an interest of ¥10. 

"It's quite easy, you only need to make an IOU," he said. 

Chuying Loan, an online lending company, told Global Times that they limit their borrowers' loan base on their level of education. 

"You only need to give your student ID, you will get the money in hours," Chuying Loan said. 

Moneyplat, a peer-to-peer (P2P) lending service, facilitates the borrowing of users from other users. The borrowed money will have to be paid back within six to seven months.

"Students want to enjoy a high-quality lifestyle, so they may need money to buy devices or take extra courses," said Song. 

"Their open minds also mean they want to seek a fashionable lifestyle, as they are no longer under the control of their parents," said Zhou Hao, a lawyer from Jia An Law Office in Beijing. 

Illegalities

"Some students use the identities of their classmates to borrow money, which is illegal," Zhou said. 

Earlier this week, a student from Henan Agricultural University killed himself, unable to take the pressure of paying ¥590,000 ($90,000) he loaned from 14 lending platforms using 28 of his classmates' ID cards. 

"Lenders sometimes set a higher interest rate than the legal standard of 24 percent a year, and they use illegal methods to collect debts, such as threatening students, their families, and teachers," said Zhou.

Earlier this month, news portal Sina reported that identities of 100 university students in Shandong province had been stolen to borrow money from Qufenqi. 

A group called "Anti-Jiexin" formed in social media website QQ said that they and their families have been receiving debt-collection texts from lending company Jiexin. 

"From the point of view of lenders, they see not only the needs of the students, but also their stability, high-quality and naivete, which means they will not simply run away from debts," Zhou said. 

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